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Opened Feb 11, 2025 by Heath Gyles@agzheath89916
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Termination Of Employment


A variety of expressions are typically utilized to describe circumstances when work is ended. These include "let go," "discharged," "dismissed," "fired" and "completely laid off."

Under the Employment Standards Act, 2000 (ESA) an individual's employment is terminated if the company:

- dismisses or stops using a staff member, including where an employee is no longer used due to the bankruptcy or insolvency of the company;
- "constructively" dismisses an employee and the employee resigns, in reaction, within an affordable time;
- lays an employee off for a duration that is longer than a "short-lived layoff".
In the majority of cases, when an employer ends the work of a worker who has actually been constantly used for three months, the employer should offer the worker with either composed notification of termination, termination pay or a mix (as long as the notice and the number of weeks of termination pay together equal the length of notice the worker is entitled to receive).

The ESA does not require an employer to offer a worker a reason that their work is being terminated. There are, nevertheless, some situations where a company can not terminate a worker's employment even if the employer is prepared to offer appropriate composed notice or termination pay. For instance, an employer can not end somebody's work, or penalize them in any other way, if any part of the factor for the termination of work is based upon the employee asking concerns about the ESA or working out a right under the ESA, such as refusing to work in excess of the day-to-day or weekly hours of work optimums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain workers are not entitled to notice of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misbehavior, disobedience, or wilful neglect of task that is not unimportant and has not been condoned by the company. Other examples consist of building and construction employees, workers on short-lived layoff, staff members who refuse an offer of affordable alternative employment and staff members who have actually been employed less than 3 months.

There are a variety of other exemptions to the termination of work provisions of the ESA. See "Exemptions to observe of termination or termination pay." Please also refer to the special guideline tool.

The termination-of-employment guidelines are completely different from any privileges a staff member may have to be paid discontinuance wage under the ESA.

Constructive dismissal

A useful termination might take place when an employer makes a considerable change to a fundamental term or condition of a worker's employment without the staff member's actual or implied approval.

For instance, a worker might be constructively dismissed if the company makes modifications to the staff member's terms and conditions of employment that lead to a significant reduction in wage or a considerable negative change in such things as the staff member's work area, hours of work, authority, or position. Constructive termination may likewise consist of situations where an employer harasses or abuses an employee, or an employer gives an employee a warning to "give up or be fired" and the worker resigns in reaction.

The worker would need to resign in action to the change within an affordable amount of time in order for the employer's actions to be thought about a termination of work for purposes of the ESA.

Constructive dismissal is a complex and challenging topic. To find out more on positive termination, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on momentary layoff when an employer cuts down or stops the worker's work without ending their work (for instance, laying someone off sometimes when there is insufficient work to do). The simple truth that the company does not specify a recall date when laying the employee off does not necessarily suggest that the lay-off is not short-lived. Note, nevertheless, that a lay-off, even if intended to be short-term, may lead to useful dismissal if it is not allowed by the employment agreement.

For the functions of the termination arrangements of the ESA, a "week of layoff" is a week in which the staff member made less than half of what they would generally make (or makes typically) in a week.

A week of layoff does not consist of any week in which the staff member did not work for several days since the employee was not able or offered to work, went through disciplinary suspension, or was not provided with work since of a strike or lockout at their place of employment or somewhere else.

Employers are not needed under the ESA to supply employees with a written notice of a short-term layoff, nor do they need to supply a reason for the lay-off. (They may, nevertheless, be required to do these things under a collective agreement or an employment agreement.)

Under the ESA, a "short-term layoff" can last:

1. not more than 13 weeks of layoff in any duration of 20 consecutive weeks; or
2. more than 13 weeks in any duration of 20 consecutive weeks, but less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the worker continues to get substantial payments from the employer; or
- the company continues to make payments for the benefit of the staff member under a legitimate group or staff member insurance coverage strategy (such as a medical or drug insurance coverage plan) or a genuine retirement or strategy; or
- the worker receives supplementary welfare; or
- the staff member would be entitled to receive supplementary welfare however isn't receiving them due to the fact that they are employed somewhere else; or
- the employer recalls the staff member to work within the time frame approved by the Director of Employment Standards; or
- the employer remembers the employee within the time frame set out in an agreement with a staff member who is not represented by a trade union; or



3. a layoff longer than a layoff explained in 'B' where the company recalls a worker who is represented by a trade union within the time set out in an arrangement in between the union and the company.
If an employee is laid off for a period longer than a short-lived layoff as set out above, the employer is considered to have terminated the worker's work. Generally, the worker will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, a company can terminate the employment of an employee who has been used constantly for 3 months or more if either:

- the employer has actually given the employee correct written notice of termination and the notification period has ended
- the employer pays termination pay to the employee where no composed notice or less notification than is required is offered
Written notification of termination

An employee is entitled to discover of termination (or termination pay rather of notice) if they have been continually used for at least three months. A person is thought about "utilized" not just while they are actively working, however also throughout whenever in which they are not working however the employment relationship still exists (for instance, time in which the employee is off ill or on leave or on lay-off).

The quantity of notice to which a staff member is entitled depends on their "duration of employment". An employee's period of work consists of not just all time while the staff member is actively working but also at any time that they are not working however the employment relationship still exists, with the following exceptions:

- if a lay-off goes on longer than a temporary lay-off, the worker's employment is deemed (or thought about) to have actually been ended on the first day of the lay-off-any time after that does not count as part of the staff member's period of employment, although the worker may still be employed for purposes of the "continuously utilized for three months" certification
- if two separate periods of employment are separated by more than 13 weeks, just the most recent period counts for purposes of notice of termination
It is possible, in some situations, for a person to have been "constantly employed" for 3 months or more and yet have a duration of employment of less than three months. In such scenarios, the employee would be entitled to discover since a staff member who has actually been continually used for at least three months is entitled to notice, and the minimum notification entitlement of one week uses to an employee with a period of employment of any length less than one year.

The following chart specifies the quantity of notification required:

Note: employment Special rules figure out the amount of notification required in the case of mass terminations - where the employment of 50 or more employees is ended at an employer's establishment within a four-week period.

Requirements during the statutory notice duration

During the statutory notice duration, a company must:

- not lower the staff member's wage rate or change any other term or condition of employment;
- continue to make whatever contributions would be required to maintain the worker's benefits plans; and
- pay the employee the incomes they are entitled to, which can not be less than the employee's regular earnings for a routine work week weekly.
Regular rate

This is a staff member's rate of spend for each non-overtime hour of work in the staff member's work week.

Regular earnings

These are earnings besides overtime pay, getaway pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and discontinuance wage and particular legal privileges.

Regular work week

For a staff member who normally works the same number of hours weekly, a routine work week is a week of that lots of hours, not consisting of overtime hours.

Some staff members do not have a regular work week. That is, they do not work the very same number of hours every week or they are paid on a basis aside from time. For these workers, the "regular wages" for a "regular work week" is the typical quantity of the regular wages made by the staff member in the weeks in which the employee worked throughout the period of 12 weeks immediately preceding the date the notice was given.

A company is not allowed to schedule a worker's holiday time during the statutory notification period unless the employee-after getting written notice of termination of employment-agrees to take their vacation time during the notice duration.

If an employer supplies longer notification than is needed, the statutory part of the notice duration is the last part of the duration that ends on the date of termination.

How to provide written notification

In many cases, written notification of termination of employment need to be addressed to the staff member. It can be provided in individual or by mail, fax or e-mail, as long as shipment can be confirmed.

There are unique rules for supplying notice of termination if a staff member has a contract of employment or a cumulative agreement that supplies seniority rights that allow a staff member who is to be laid off or whose employment is to be terminated to displace (" bump") other employees.

Because case, the company must post a notice in the work environment (where it will be seen by the employees) setting out the names, seniority and job classification of those workers the company means to end and the date of the proposed termination. The posting of the notice is thought about to be notice of termination, as of the date of the posting, to a staff member who is "bumped" by a worker named in the notice. However, this notice of termination should still fulfill the length requirements set out in the ESA.

There are likewise special guidelines relating to how notification is provided when there is a mass termination.

Termination pay

An employee who does not receive the composed notification needed under the ESA needs to be provided termination pay in lieu of notice. Termination pay is a swelling amount payment equivalent to the regular earnings for a regular work week that a staff member would otherwise have been entitled to throughout the composed notice duration. A worker earns holiday pay on their termination pay. Employers should likewise continue to make whatever contributions would be needed to keep the benefits the worker would have been entitled to had they continued to be used through the notification duration.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her job has been gotten rid of and her work has been terminated. Sarah was not offered any written notification of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She likewise got 4 percent vacation pay. Because she worked for more than three years however less than four years, she is entitled to 3 weeks' pay in lieu of notification.

Sarah's regular incomes for a routine work week are computed:

$ 20.00 an hour X 40 hours a week = $800.00 a week


Her termination pay is calculated:

$ 800.00 X 3 weeks = $2,400.00


Then her trip pay on her termination pay is determined:

4% of $2,400.00 = $96.00


Finally, her getaway pay is included to her termination pay:

$ 2400.00 + $96.00 = $2,496.00


Result: Sarah is entitled to $2,496.00. The employer must likewise make sure continued coverage for any advantage or pension plans that applied to her for 3 weeks.

Example: No regular work week

Gerry has actually worked at a retirement home for four years. He works weekly, however his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent holiday pay.

Gerry's company removed his position and did not provide Gerry any written notification of termination. Gerry was ill and off work for two of the 12 weeks right away preceding the day his work was terminated. Gerry made $1,800.00 in the 12 weeks before the day on which his work ended.

Gerry is entitled to four weeks of termination pay.

Gerry's average profits weekly are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks therefore these weeks are not consisted of in the computation of average revenues) = $180.00 a week


His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00


Then his holiday pay on his termination pay is computed:

6% of $720.00 = $43.20


Finally, his vacation pay is added to his termination pay:

$ 720.00 + $43.20 = $763.20


Result: Gerry is entitled to $763.20. The employer needs to likewise ensure ongoing coverage for any advantage or pension that applied to him for 4 weeks.

When to pay termination pay

Termination pay should be paid to a staff member either 7 days after the staff member's work is terminated or on the worker's next regular pay date, whichever is later on.

Mass termination

Special guidelines for notice of termination might apply in cases of mass termination (when an employer is terminating 50 or more staff members at its facility within a four-week period).

Meaning of "establishment"

An "facility" is an area at which the employer continues business. Separate locations can be thought about one facility if either:

- they are located within the same town, or
- a worker at one location has legal seniority rights that reach the other place, allowing the worker to displace another staff member (likewise called "bumping rights").
Effective October 26, 2023, in cases of mass termination, the term "facility" consists of an employee's home, however only if the staff member works from home and does not work at any other location where the employer continues company.

This will require that workers who work specifically remotely be considered for inclusion in the count when figuring out whether 50 or more workers have been ended.

Note that where a worker performs work both from their home and from another area where the employer continues business (for instance, an office), their home is not consisted of in the definition of "facility". Instead, the employee is thought about to have a connection to the office location and, therefore, for the function of mass termination, the worker is consisted of with respect to that office location.

Example: where numerous places are considered one "facility"

ABC Company has an office and a warehouse situated in London, ON. Sabrina resides in London and works for ABC Company exclusively remotely: she carries out work for the business from home and does not work at the office.

For the function of mass termination, the business's London workplace, London warehouse and Sabrina's London home are thought about one "facility."

Employer obligations in a mass termination

When a mass termination occurs, the company must finish and provide the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:

- email to esa_form1_notice@ontario.ca.
- fax to (416) 326-7061.
- individual delivery to the Director's workplace on a day and at a time when it is open.
- mail shipment to the Director's office, if the delivery can be confirmed.
The office of the Director of Employment Standards is located on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.

Any notification to the affected employees is ruled out to have actually been provided till the Form 1 is received by the Director; simply put, notice of mass termination is not efficient up until the Director receives the Form 1.

In addition to providing employees with individual notifications of termination, the employer must, on the very first day of the notification period:

- publish a copy of the Form 1 offered to the Director in the workplace where it will pertain to the attention of the affected staff members.
- provide a copy of the Form 1 to each affected worker.
The quantity of notification staff members must receive in a mass termination is not based upon the employees' length of work, however on the number of employees who have been ended. An employer must provide:

- 8 weeks notice if the employment of 50 to 199 workers is to be terminated
- 12 weeks notice if the work of 200 to 499 staff members is to be terminated
- 16 weeks see if the work of 500 or more staff members is to be terminated
Exception to the mass termination guidelines

The mass termination rules do not use if these 2 things apply:

- the number of employees whose work is being terminated represents not more than 10 percent of the workers who have actually been utilized for a minimum of three months at the facility
- none of the terminations are caused by the long-term discontinuance of all or part of the company's service at the facility
Mass termination: resignation by a staff member

A worker who has received termination notification under the mass termination guidelines who wants to resign before the termination date supplied in the employer's notification should give the employer at least one week's composed notification of resignation if the employee has been used for less than 2 years. If the employment period has actually been two years or more, the employee should give a minimum of 2 weeks' written notification of resignation. However, the staff member does not have to notify of resignation if the employer constructively dismisses the employee or breaches a regard to the contract.

Temporary work after termination date in notification

An employer can offer work to an employee who has been notified of termination on a momentary basis in the 13-week duration after the termination date set out in the notification without affecting the initial date of the termination and without being needed to offer any more notification of termination to the employee when the momentary work ends.

If a worker works beyond the 13-week period after the termination date and after that has their work terminated, the staff member will be entitled to a new composed notification of termination as if the previous notification had never been given. The worker's period of employment will then likewise include the period of temporary work.

Recall rights

A "recall right" is the right of a worker on a layoff to be called back to work by their company under a term or condition of work. This right is frequently found in cumulative contracts.

A staff member who has recall rights and who is entitled to termination pay since of a layoff of 35 weeks or more may select to:

- keep their recall rights and not be paid termination pay (or severance pay, if they were entitled to severance pay) at that time; or
- quit their recall rights and get termination pay (and severance pay, if they were entitled to severance pay).
If a staff member is entitled to both termination pay and severance pay, they need to make the very same option for both.

If a worker who is not represented by a trade union chooses to keep their recall rights or stops working to decide, the employer should send out the quantity of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If a staff member who is represented by a trade union elects to keep their recall rights or fails to decide, the employer and the trade union should attempt to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the employee. If they can not concern an arrangement, and the trade union recommends the employer and the Director of Employment Standards in writing that efforts have failed, the employer should send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee picks to provide up their recall rights or if the recall rights end, the cash that is kept in trust should be sent out to the employee.

If the employee accepts a recall back to work, the money that is held in trust will be returned to the company.

Exemptions to observe of termination or termination pay

Much of these exemptions are complicated. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, employment if you need more info. Please likewise describe the special rule tool.

The notice of termination and termination pay requirements of the ESA do not apply to a worker who:

- is guilty of wilful misbehavior, disobedience or wilful disregard of responsibility that is not insignificant and has actually not been excused by the employer. Note: "wilful" includes when a staff member meant the resulting repercussion or acted recklessly if they knew or should have understood the results their conduct would have. Poor work conduct that is unexpected or unintentional is generally ruled out wilful;
- was hired for a particular length of time or up until the conclusion of a specific task. However, such a staff member will be entitled to observe of termination or termination pay if:- the employment ends before the term ends or the job is finished; or
- the term expires or the task is not finished more than 12 months after the employment started; or
- the employment continues for 3 months or more after the term ends or the job is finished;


See also: Employment Standards Self-Service Tool

Wrongful termination

Rights greater than ESA notification of termination, termination pay, discontinuance wage

The rules under the ESA about termination and severance of work are minimum requirements. Some staff members might have rights under the typical law that are higher than the rights to see of termination (or termination pay) and severance pay under the ESA. A staff member might wish to sue their former company in court for "wrongful termination". Employees must understand that they can not sue a company for wrongful dismissal and sue for termination pay or discontinuance wage with the ministry for the very same termination or employment severance of employment. An employee should pick one or the other. Employees may want to obtain legal advice worrying their rights.

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Reference: agzheath89916/3srecruitment#62